RMG's CEO on 2011 as tipping point year. Really. Finally.

November 30, 2010 by Dave Haynes

Every year for what seems like a buncha years (save 2009), people in the the digital signage and DOOH sectors have done look-aheads and labeled the coming year as the tipping point – the big moment when the business gas pedal gets punched.

Well … we know how that’s gone so far.

But Garry McGuire, CEO of Reach Media Group, makes a pretty solid case for 2011 in a piece up on iMedia Connection. Reach, aka RMG Networks, is probably the fastest-growing and best funded DOOH company on this continent, and the company is likely to lead the consolidation and M&A news in 2011.

In a piece aimed at the marketing and agency sector iMedia targets, McGuire goes over some ground that will be pretty familiar to people directly in the sector. But this stuff struck me:

Top industry talent is moving into the category. Great media sales people are success-driven. The early adopters who’ve been involved for years in the sector did so for the challenge and the passion they had for this emerging medium. They travelled a rough, bumpy road. Now we’re seeing some of the most successful media sales pros come in because that road’s largely been paved for them, and the incentives are far more real.

Many players in this category are becoming profitable. The capital and operating costs of establishing and running networks have plummeted in recent years, substantially shortening the timeline to profitability. The lower operating costs and increased media spend in the industry have produced handsome results for many companies in our industry. Several of the top DOOH networks in the U.S. have hit profitability for the first time ever this year.

Major holding companies are making equity investments. Expect a major media holding company to enter the sector in some fashion in the coming year.

Interesting. A major agency group taking a direct stake would a fairly seismic event, as would direct entry by a major media company. Most of the big tech companies have now stuck more than their toes in (save, perhaps, IBM). Is this sector getting big enough for a major media or online property?

Worth a read …